$1.8B for air traffic satellite plan

WASHINGTON — A team led by defense contractor ITT Corp. on Thursday won a government contract worth up to $1.8 billion to build the first portion of a new satellite-based air traffic control system.

Dan Caterinicchia

WASHINGTON — A team led by defense contractor ITT Corp. on Thursday won a government contract worth up to $1.8 billion to build the first portion of a new satellite-based air traffic control system.

The Federal Aviation Administration, which awarded the contract, said upgrading the system used to manage commercial and general aviation traffic will help reduce congestion on runways and in the skies, and do so at a lower cost than the existing radar-based system. White Plains, N.Y.-based ITT beat out teams led by defense contracting giants Lockheed Martin Corp. and Waltham, Mass.-based Raytheon Co.

The full upgrade of the air traffic control system is expected to cost more than $15 billion and take nearly 20 years to build. ITT will receive $207 million for the first three years of its work on the contract, which could be spread out over a total of 18 years.

The current system uses 50-year-old analog radar technology to handle roughly 85,000 flights per day, a number predicted to reach more than 111,000 daily flights by 2020. A satellite-based system could handle about three times current air traffic levels.

Congress has until Sept. 30 to reauthorize the FAA and possibly raise taxes and fees to pay for upgrades to the traffic control system and other aviation programs. But commercial airlines are battling corporate jets and small plane operators over what share of the cost they each should shoulder.

The Department of Transportation earlier this month said the airline industry's on-time performance in the first half of 2007 was its worst since comparable data began being collected in 1995. But despite expected delays, 15.7 million passengers are expected to fly on U.S. airlines over the extended Labor Day holiday, the Air Transport Association said last week.

FAA Administrator Marion Blakey on Thursday said if the agency's reauthorization does not tie its revenue to its business costs, "the improvements will sputter along, the delays will only get worse and every weekend will feel like Labor Day."

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